Financial Wellness During Open Enrollment: A Smart Season to Plan Ahead

As open enrollment season kicks off, it’s more than just a time to review your health benefits—it’s time take stock of your overall financial wellness and take meaningful steps toward your future.

At Bank of Hawaii, we believe financial well-being is essential to thriving in our island home, where the cost of living is among the highest in the nation. That’s why we’re here to help you with tips to help you reach your possible.

What is Open Enrollment?

Open enrollment is the annual period when you can make changes to your health insurance, retirement contributions, and other employer-sponsored benefits.

It’s a great time to align your choices with your financial goals, lifestyle needs, and any recent life changes—like a new job, growing family, or evolving health priorities. (You can also make certain changes during Special Enrollment Periods—known as SEPs.)

Using Open Enrollment to Improve Financial Wellness

Your benefits package can play a big role in your financial wellbeing. Here are important steps to help you make smart decisions:

1. Review Your Health Coverage
   Take time to compare plans and consider your expected medical needs. Choosing the right coverage can help you avoid unexpected expenses and keep your budget on track by helping you:
   • Look beyond basic medical: It’s a good idea to check whether your plan includes or allows add-ons for prescription drug coverage, vision, and dental—these can be essential and often overlooked.
   • Balance cost versus flexibility: Consider whether a lower-premium Health Maintenance Organization (HMO) fits your needs or if you'd prefer a Preferred Provider Organization (PPO) that lets you choose your own doctors and specialists.
   • Understand deductibles vs. premiums: A lower monthly premium often comes with a higher deductible, meaning you’ll pay more out-of-pocket before coverage kicks in. If you expect frequent medical visits, a higher premium plan with a lower deductible might save you money in the long run.
   • Learn how your employer plan works with Medicare: If you have benefits through your employer and are on Medicare or thinking about enrolling, it’s a good idea to check how your plans work together. Reach out to your HR department—they can help you understand your options. And remember, Medicare Open Enrollment is October 15 to December 7, every year.
     
     Tip: Don’t get caught by surprise. Open a dedicated savings account for emergency funds and out-of-pocket expenses.

2. Revisit Life & Disability Insurance
   Life changes—like marriage, a new child, or a career change—can affect your insurance needs. Make sure your coverage reflects your current situation.
   • Protect loved ones from financial hardship: If you’re the primary income earner, term life insurance can provide financial security if something happens to you.
   • Safeguard your income: Disability Insurance (DI) and Accidental Death and Disability (AD&D) insurance can help replace lost wages if you're unable to work due to illness or injury.
   • Look into supplemental insurance: Hospital, critical illness, or cancer insurance often pay a lump sum and work with your medical insurance to help cover out-of-pocket costs.
     
     Explore: Learn how insurance planning can help you prepare for the unexpected and protect your loved ones. 
     
     Insurance products are not a deposit; not FDIC insured; not insured by any federal government agency; and not guaranteed by Bank of Hawaii or any of its affiliates.
3. Use Tax-Advantaged Accounts
   Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) can help you save on taxes while budgeting for healthcare and transportation costs. Here’s how:
   • Save on everyday healthcare: FSAs and HSAs let you use pre-tax dollars for medical expenses like prescriptions, copays, eye exams, dental care, over-the-counter drugs, feminine care products and even sunscreen. These accounts help you budget for known and unexpected health costs while reducing your taxable income.
   • Offset parking costs: If your employer allows it, you can use an FSA to pay for eligible parking expenses with pre-tax dollars—helping you save money on commuting.
     
     Tip: If you have a Flexible Spending Account (FSA), you can save money on everyday medical supplies like bandages, glasses, and over-the-counter medications by using pre-tax dollars.
4. Choosing Optional Benefits
   Depending on your employer, you may be offered a wide range of options ranging from pet insurance and wellness programs to fraud protection and educational benefits. It pays to check out your options early so you have time to decide.
   • Tip: How do these costs affect your budget? Use our mobile app to keep track of your budget and manage our money.
5. Boost Your Retirement Contribution
   Although many retirement plans let you adjust your contributions at any time, open enrollment can be a reminder to reassess your retirement strategy.
   • Compound growth advantage: Even small increases in contributions can grow significantly over time thanks to compounding interest.
   • Tax benefits today, security tomorrow: Contributions to 401(k)s or IRAs may reduce taxable income now while building a nest egg for the future.
     
     Tip: If you’re 50 or older, you can also make annual catch-up contributions up to $7,500 to your 401(k) and other plans.

Bank of Hawaii is Here to Help

We’re committed to helping you make informed decisions that support your financial wellness. Whether you’re planning for retirement, managing healthcare costs, or building a safety net, our tools and services are designed to guide you every step of the way.

Ready to Take Action?

• Explore our SmartMoney Hub of financial wellness tools and resources
• Open an account to cover unexpected medical or life expenses.

Open enrollment is more than a deadline—it’s a chance to take control of your financial future. Let Bank of Hawaii help you reach your possible.

This material has been prepared for informational purposes only, and is not intended to provide nor should it be relied upon for tax, legal or accounting advice. Please consult your tax, legal and/or accounting advisors for your specific situation.